The UK government is in danger of regulating non-fungible tokens (NFTs) in a way that does not reflect the true nature of the emerging technology, says Mintable CEO and founder Zach Burks.
In an interview with Cointelegraph, Burks said he believes a recent report from a British parliamentary committee significantly exaggerates the role NFTs play in copyright infringement and fails to recognize that they are more than just fleeting digital images.
“NFTs are in a transition phase where they’re moving away from the speculative boom in PFPs, and now they’re moving into tools from brands that are implementing NFTs for a whole bunch of different things,” Burks explains.
In the October 11 report, the Culture, Media and Sport Committee urged the government to take action to protect artists and content creators from copyright infringement related to NFTs.
NFT marketplaces must do more to address the extent of copyright infringement on their platforms.
We published our report on “NFTs and the Blockchain: Risks for Sports and Culture”.
More information: https://t.co/4pYE6gAngw
Read our report: https://t.co/XIj0LYlcrX@cj_dinenage pic.twitter.com/GTbtOJCM8m– Culture, Media and Sport Committee (@CommonsCMS) October 11, 2023
Burks acknowledged that copyright protection and intellectual property rights for artists are of paramount importance, pointing to Mintable’s proprietary IP protection algorithm that it uses to prevent plagiarism on its platform.
However, he explained that while these issues should be a top priority for all NFT platforms, they are not exactly NFT-specific issues.
“These are problems inherent to the internet, not NFTs.”
“Regulators are saying, ‘Well, NFTs are being used for copyright infringement.’ Well, that goes for WordPress too. This also applies to YouTube. That also applies to Spotify,” he said. “And how do you combat that? Well, you have some of the largest, most advanced companies in the world, like Google, working on this.”
“They have hundreds of billions of dollars and they can’t solve the problem of fighting copyrighted material on YouTube. It’s not like this problem just came out of the blue because NFTs were created.”
Burks, who personally corresponds weekly with British government officials about NFTs, said that while NFT platforms should do their utmost to protect artists, it is up to regulators to embrace a more nuanced view of NFTs as a whole.
It was such a great time to speak at the 40th International Symposium on Economic Crimes at the University of Cambridge in the UK!
I learned so much, met some great people, and hopefully educated the people who listened to my many panels on NFTs and the blockchain space! pic.twitter.com/txExSVqTIb
– Zach Burks (@ZachSpaded) September 14, 2023
“There are so many ways you can use NFTs, whether it’s for your car data, whether it’s for your ownership data, whether it’s a bank settlement document, whether it’s a backup layer, whether it’s an entire supply chain system or a biofuel company,” he said.
“It is not just a work of art or a financial instrument. […] An NFT is essentially a website.”
“If my website is used to sell books, I am subject to the laws governing the sale of books. If I sell drugs on my website, you don’t need new laws. I still only sell drugs, right?” he said laughing.
According to Burks, NFTs are an extremely broad technology capable of a wide range of different functions, and if a committee declares that they are regulated as digital works of art it could be a significant setback to revealing the technology’s true utility.
“The [committee] said the government should implement the EU-17 Copyright Directive on NFTs, which is bad in the sense that it is a very broad umbrella,” he said.
In the report, the committee said the “most pressing issue” raised by NFTs was the risk to artists’ intellectual property rights posed by the ease and speed with which tokens can be minted. It suggested that they would be regulated under a relatively narrow copyright directive: Article 17 of the European Union Copyright Directive.
The committee’s recommendations to the British government. Source: British Parliament
“Saying that all NFTs need this one element of legal coverage is the equivalent of saying, ‘We need this one piece of legislation that covers this piece of technology,’ which may have started with the Edison light bulb, but now we’re dealing with Teslas,” Burks said.
“So we have to be very careful when it comes to these kinds of overarching regulatory frameworks that we apply to NFTs as a system, rather than looking at NFTs as they actually are.”
Ultimately, Burks believes the British government could take some notes from regulators in Singapore, where the government rates NFTs based on their specific use cases.
“Regulators in Singapore look at what an NFT actually is and go from there,” he explained. “Let’s say you have an NFT of a Tesla stock. Well, that’s a security. Oh, this is an NFT of a bag of cocaine that facilitates the sale of drugs? They then regulate them in the same way as illegal drugs.”